Why Moldova Matters

By Matthew Rojansky, Lyndon Allin

Although the air outside is hot and dry—part of a heat wave scorching Russia and neighboring Ukraine—it is cool, dark, and slightly damp in the sandstone caverns beneath Milestii Mici, Moldova’s largest winery. Along seemingly endless underground boulevards, Soviet-era lighting and updated signs point the way to underground galleries housing millions of liters of meticulously produced and preserved wine in bottles and oak barrels—just part of the winery’s two-million-bottle collection, acknowledged by Guinness as the world’s largest.

Moldovan wines were preferred by the Soviet elite, and Milestii Mici—along with Cricova, the wine cellar complex where Sovietskoe Shampanskoe, or sparkling wine, was produced—were known far and wide. Today, they do a healthy business, but exports are mostly to Russia and a few neighboring Central European countries and prices are low—an excellent vintage bottle costs as little as $10.

Moldova itself, like the country’s wine industry, represents one of Europe’s last remaining bargains. With a population of around 4 million people, and a land area about the size of the state of Maryland, it possesses some of Europe’s richest and most scenic farmland, a highly motivated workforce (hundreds of thousands of whom are already working in the European Union and Russia), and substantial if decaying infrastructure and industry installed by the Soviet government. Not only is the country relatively inexpensive as a destination for tourism and investment, it arguably has the most pluralistic and democratic political system of all the former Soviet countries in the Commonwealth of Independent States (CIS).

Despite Moldova’s economic appeal and political openness, it remains stuck in a development rut. Pressure from internal and external forces exacerbates divisions between Romanian speakers and Russian speakers, confuses national priorities, and erodes the rule of law. But global powers on opposite sides of the Euro-Atlantic space are critical players in Moldova’s development, and now have an opportunity to help transform Moldova into an unqualified post-Soviet success story—proof that a prosperous, pluralistic, democratic state can exist in the space between East and West. This is particularly true in light of the U.S.-Russia “reset” and a parallel EU-Russia “partnership.”

Moldova’s recent political history is nothing short of complex. Since 1991, it has had three peaceful transfers of power—more than any other post-Soviet state except the Baltics. But its biggest domestic political challenge remains the absence of strong political leadership that represents the will of most Moldovan citizens. In April 2009, street protests following an allegedly fraudulent parliamentary election brought down the long-serving Communist government of President Vladimir Voronin.

Since then, the coalition of right-leaning opposition forces that came to power has failed to agree on a successor. Instead, they will ask voters to amend the constitution in September so that the president can be chosen by a direct ballot as early as the next parliamentary elections, currently scheduled for November. In the meantime, candidates on all sides are engaging in creative math to determine who is likely to form a ruling coalition in Parliament.

The outcome of this election is particularly important—with both the presidency and control of Parliament likely to be up for grabs during the same campaign, there are significant incentives for politicians on all sides to seek a compromise that will provide the new leadership with a strong mandate to govern, while protecting the interests of the defeated minority. This is no small task in a country like Moldova, where politics has long been divided along ethnic lines.

Some parties, like current Speaker Mihai Ghimpu’s Liberal Party, appeal almost exclusively to Romanian-speaking Moldovans, excluding Russians, Ukrainians, and other minorities—who together make up roughly 20 percent of the population—as well as many of the country’s elites. While Russian speakers tend to favor Voronin’s Communist Party, Voronin is prevented by term limits from running for president again, and his domination of the party means few appealing Communist candidates for the job.

Other political figures attempt to take a more centrist role. Prime Minister Vlad Filat, who leads the Liberal Democratic Party, takes a pragmatic, business-oriented approach, traveling to Brussels and focusing on Moldova’s European integration, but also visiting with Russian leaders and attempting to preserve access to Russian markets for Moldovan wines and agricultural products. These products have been jeopardized in recent months by Russian health service embargoes that appear to be politically motivated.

Meanwhile, Marian Lupu, a refugee from the Communist Party, positions his Democratic Party as the social-democratic alternative and has actively courted both Russian speakers in Moldova and Russian leaders in Moscow. Both the Liberal Democratic and Democratic parties have eschewed ethnic nationalism and the politics of language and, in doing so, remind Moldovans of their country’s longstanding multiethnic harmony: Romanian and Russian speakers, Ukrainians in the east, Gagauzian Turks in the south, and Soroka, with a sizable Roma (gypsy) population, nestled in the hills above the Nistru river, all coexisting peacefully.

Of course, the best known counterexample to Moldova’s history of interethnic harmony is the separatist “frozen conflict” in Transdniester, the narrow belt of Moldovan territory on the east bank of the Nistru. Transndniester—dominated by Russian speakers who held favored positions during the Soviet era and who fought a brief but bloody war to secede from Moldova in 1992—is now secured by more than one thousand Russian troops, some of whom operate as peacekeepers and some of whom guard a large stockpile of Red Army weapons withdrawn from Central Europe in the late 1980s.

Transdniester also contains the key industrial infrastructure of the former Moldovan Soviet Socialist Republic (SSR), including a major gas power plant that serves eastern Moldova and parts of Ukraine and Romania. While it made up only 12 percent of the territory, Transdniester provided 40 percent of the Moldovan SSR’s GDP in 1990.

Transdniester is important for other reasons as well. Although there has been no shooting on the Moldova-Transdniester border since the 1992 cease-fire, uncertainty over the fate of the breakaway region and concerns about border security and trafficking have kept Moldova itself off the short-list for European integration for twenty years. With neighboring Romania’s EU accession in 2007, though, Moldova became a logical candidate for consideration.

The arguments for Moldovan integration into a wider Europe transcend mere geography. First, Moldova has much to offer economically, including a well-regarded, highly mobile workforce with pockets of impressive entrepreneurialism and high-tech innovation; fertile agricultural land that accounts for over 40 percent of the country’s GDP and could become even more productive through better management; widespread but deteriorating infrastructure in need of investment; and a small but vibrant market already gobbling up European consumer goods. The team surrounding Filat, who has articulated a strategy of “rethinking Moldova,” symbolizes the country’s potential.

Second, Moldova would be the first CIS country to join the EU—a powerfully positive symbol—and would encourage neighboring Ukraine to adopt reforms necessary for its own European ambitions. Moldova’s integration with Europe will even help thaw the Transdniester conflict, since the separatist region’s economy already relies heavily on manufacturing for export and shipment, and improved access to European markets would be a powerful incentive for Tiraspol and Chisinau to find a compromise.

Although some in the EU fear that welcoming Moldova would open the floodgates of economic migration that saw millions of Romanians, Poles, and Hungarians descend on Italy, France, and Germany after the last wave of EU accessions, the opposite is true. Europe already hosts hundreds of thousands of Moldovan guest workers, of whom a substantial portion are illegal. Throughout Europe, Moldovan labor is valued, but restrictive visa regimes have forced many labor migrants to pay smugglers to cross borders illegally. These same workers then remain underground and are too afraid of being deported to report crimes to police in their host countries.

Indeed, rather than increase labor migration from Moldova, the EU—by admitting Moldova—may actually inspire more Moldovan migrants to return home and to travel and work legally, undercutting smugglers and gangsters who traffic in people, drugs, and weapons. Most of all, integrating Moldova into Europe would help extend the reach of the EU’s transparency and security rules, which would provide a clear model and an immediate incentive to help Transdniester and neighboring Ukraine reform.

Although EU accession for Moldova may be unrealistic under present conditions, Brussels should seek to extend visa liberalization and forge a trade cooperation agreement with Moldova as soon as possible. This approach will enable Moldovans to enjoy many of the much-needed benefits of European integration, while minimizing alarm from EU skeptics in “old Europe” and Russia. Although much work remains, Chisinau has already pursued an impressive array of reforms to meet EU standards. U.S. and European support for such initiatives—especially in the areas of government transparency and infrastructure rehabilitation—has been and will continue to be essential.

Capitalizing on the momentum of the U.S.-Russia “reset” and joint statements by Russian President Dmitry Medvedev with German Chancellor Angela Merkel and Ukrainian President Viktor Yanukovich, the so-called “5+2” parties (Moldova, Transdniester, the Organization for Security and Co-operation in Europe, Russia, and Ukraine with the EU and United States observing) should renew efforts to negotiate a solution to the conflict in Transdniester. Neither side will abandon its maximalist goals—independence versus complete reunification—easily, but promising bilateral talks to spur cooperation in areas such as banking, transportation, and education are already underway. As the key trading partners and security guarantors for both Moldova and Transdniester, the EU, Russia, Ukraine, and the United States can adopt a joint approach that builds on existing bilateral cooperation and highlights the likely region-wide economic development if the conflict is resolved.

Editors Note: Lyndon Allin is a Washington-based lawyer and served as the 2008-09 IREX Embassy Policy Specialist in Moldova and Matthew Rojansky is deputy director of the Russia and Eurasia Program at the Carnegie Endowment for International Peace.